Petronas-led Consortium Bids for Sumatra-Singapore Pipeline

A Petronas-led consortium, which includes Singapore Petroleum Co, Gulf Indonesia and Talisman, has submitted a bid for a stake in the $500 million Sumatra-Singapore natural gas pipeline. The deadline for final bid submission is in February.

The Indonesian gas transporter PT Perusahaan Gas Negara, which holds the transportation contract of the pipeline, is offering 25-40% of the planned pipeline. The pipeline will be delivering gas from three gas blocks in Sumatra, Indonesia, namely: Corridor and South Jambi B blocks, which are operated by Gulf Indonesia; and Jabung block, operated by Devon. Gulf holds 54% of the Corridor PSC, Talisman (36%) and Pertamina (10%). South Jambi B PSC is 45%-held by Gulf, Devon (30%) and Pertamina (25%).

Singapore Power, through its subsidiary PowerGas, signed in February last year, a gas sales agreement with Pertamina for the supply of gas to Singapore from 2003. The gas sales agreement is for the supply of a contract quantity of 2.27 Tcf of gas to Singapore from the gas fields in South Sumatra, Indonesia. Initially, 150 million cubic foot will be supplied on a daily basis with the volume being increased to 350 Mmcf/day by the year 2009. The $9 billion contract is valid for a period of 20 years commencing 2003 with a provision for further extension. The gas supply will be piped through the 500 km high-pressure pipeline originating from the Grissik gas plant, passing through the Jabung Block en route to Batam and onward to Singapore. The first delivery of gas is expected around the second half of 2003.

PGN has already started the initial construction of the pipeline. Almost half of the 500-km pipeline will be offshore.